PRIA Logo™
119-s-2662119th CongressWALLET

504 Modernization and Small Manufacturer Enhancement Act of 2025

Sponsored By: Senator Klobuchar, Amy [D-MN]

In Committee

Summary

Boost capital access for small manufacturers. This bill would modernize the Small Business Administration 504 loan program to raise manufacturing loan caps, add workforce and energy goals, and tighten leasing rules and oversight to keep loans focused on operating businesses.

Show full summary
  • Small manufacturers: Raises the manufacturing 504 loan cap from $5.5 million to $10.0 million, sets graduated equity rules (generally 5% and 10% in some cases), allows up to 100% financing for expansion refinancing, and limits guaranteed debenture support to 50% of project cost.
  • Certified development companies and lenders: Expands closing flexibility for accredited certified development companies to correct and reallocate items including up to 10% of project costs, and adds monitoring requirements, annual exams for five years then biennial reviews, and anti-investor certifications.
  • Workers and communities: Adds a 12-week training requirement or contracted trained-applicant pathway for workforce development, requires each SBA district to partner with at least one resource partner for manufacturer training, and broadens program goals to encourage minority, employee, and women ownership plus energy efficiency and disaster-area revitalization.

Personalized for You

How does this bill affect your finances?

Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.

Free to download

Bill Overview

Analyzed Economic Effects

5 provisions identified: 2 benefits, 2 costs, 1 mixed.

Bigger 504 loans for manufacturers

If enacted, the 504 loan cap for manufacturing projects would increase to $10,000,000. If enacted, qualifying small manufacturers could refinance expansion costs up to 100 percent of the expansion project. If enacted, lenders could not require extra collateral for qualifying small manufacturers. These changes would take effect when the bill is enacted.

Training and workforce rules for manufacturers

If enacted, the 504 program would add goals like helping minority, employee, and women-owned firms, energy efficiency, disaster area recovery, and very small businesses (10 or fewer workers). If enacted, projects would need a workforce development plan: either an in-house training program of at least 12 weeks or a contract to hire applicants who completed at least 12 weeks of relevant training. If enacted, each SBA district office would partner with local resource partners to give training to manufacturers on getting 504 help.

New borrower equity and caps

If enacted, any guaranteed debenture for a qualifying small manufacturer could not exceed 50 percent of the project's cost. If enacted, small manufacturers would generally need to contribute at least 5 percent of project cost as equity. If the business is under 2 years old and the project is a limited or single-purpose building, the required contribution would be 10 percent.

New leasing limits and oversight

If enacted, new 504 rules would limit permanent leasing in assisted projects. If enacted, new construction projects could permanently lease up to 20% only if the borrower occupies at least 60% at closing and meets 3- and 10-year occupancy plans. If enacted, existing buildings may permanently lease up to 50% if the borrower occupies at least 50%, with a narrow exception to exceed 50% that requires extra notice, annual reviews for five years, then biennial checks, and anti-investor certifications. If enacted, residential lease terms would be capped at 1 year and commercial leases at 5 years.

Closing review and lender closing powers

If enacted, certified development companies would get new closing powers, such as reallocating up to 10% of project costs, fixing names and addresses, adding eligible passive or operating companies, changing interim lenders in limited cases, converting guarantors and co-borrowers, and allowing a designated company attorney to certify closing documents. If enacted, a CDC without a designated attorney could name one within 180 days under Administrator approval. If enacted, 180 days after enactment the SBA Office of Credit Risk Management would handle 504 file reviews and district counsels would no longer review closing packages.

Sponsors & CoSponsors

Sponsor

Klobuchar, Amy [D-MN]

MN • D

Cosponsors

  • Sen. Young, Todd [R-IN]

    IN • R

    Sponsored 8/1/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
Back to Legislation